All About Gemini, the Winklevoss Cryptocurrency Exchange

What Is Gemini?

Gemini is a privately-owned cryptocurrency exchange that allows users to buy, sell, trade, and securely store bitcoin, ether, and about 40 other cryptocurrencies. It was launched in 2015 by Cameron and Tyler Winklevoss.

Gemini has a tiered service with separate interfaces and fee structures for casual investors and hardcore traders. It has a mobile app, a payment app, and its own currency, the Gemini dollar. Unlike most cryptocurrencies, the Gemini dollar is a "stable coin" tied to the U.S. dollar.

Gemini is a direct competitor to cryptocurrency exchanges including Coinbase and Kraken.

The formal name of the company is Gemini Trust Co., LLC.

Key Takeaways

  • Gemini is a cryptocurrency platform for buying, selling, storing, and spending cryptocurrencies, with a website and a mobile app.
  • Its major selling points are security and ease of use.
  • It supports trading in more than 40 cryptocurrencies and has its own currency, the Gemini stable coin.
  • Since its 2015 launch, Gemini has added a payment app and an interest-paying savings account. A Gemini credit card is in the works.
  • Its founder-owners, Cameron and Tyler Winklevoss, have hinted at an interest in launching an initial public offering (IPO).

Understanding Gemini

As any astrology buff knows, Gemini represents twins and indicates duality. Aside from the obvious reference to the Winklevoss twins, the Gemini name is a reference to the Gemini space program. (The holding company that owns the Gemini platform and the brothers' other assets is called Gemini Space Station.)

The platform is conceptualized as a marriage of new-age cryptocurrencies and existing conventional currencies. U.S. dollars and bitcoins are traded on Gemini.

As in any currency exchange, Gemini exchange users can trade currency pairs in about 20 combinations. Most of the combinations include the U.S. dollar (USD), bitcoin (BTC), or ether (ETH). So, for example, the currency pair displayed as ZEC/USD is an exchange of zcash for U.S. dollars.

Working on the core principles of security, liquidity, and trust, Gemini offers its retail and institutional customers a platform to buy, sell, and store digital currencies in a regulated and secure environment.

How To Trade on Gemini

Barring the occasional maintenance window, the Gemini exchange operates on a 24/7 basis.

As in any online broker, a standard market order on Gemini is filled immediately at the best available market price at that instant. Gemini also offers a variety of limit orders. They include immediate or cancel (IOC), maker or cancel (MOC), and auction-only (AO) limit orders.

All orders sent on Gemini have to be fully funded, as the exchange does not offer margin trading like that offered by competitors such as Kraken. It also does not allow short trading.

Customers link a bank account and initiate a wire transfer or an ACH deposit from a bank in order to trade on the platform.

Gemini's focus is on user security. Most users' crypto is stored in offline "cold storage" while the ready money is held in an insured "hot wallet."

Customers can transfer coins from a cryptocurrency wallet to a Gemini account, and vice-versa. To deposit crypto coins into a Gemini account, the customer needs to generate an exclusive deposit address on the Gemini platform and then initiate the transfer from the wallet to the deposit address.

First-of-Its-Kind Custodian Service

Along with being a standard virtual currency exchange, Gemini offers custodian services to its clients.

It is licensed by the New York State Department of Financial Services (NYDFS) to hold a customer’s digital assets in trust on behalf of the customer. That is, your digital currency holdings are held to reserve requirements and banking compliance standards. Gemini is also obligated to maintain and fulfill required cybersecurity measures.

Gemini has a banking relationship with a New York State-chartered bank, State Street, where all customer funds are retained. The platform's adherence to conventional banking requirements ensures that money in whatever form is backed by adequate monetary reserves.

While individual customers are given the default, zero-fee, depository account type, large institutional customers can opt for a segregated custody account type with an offline, secure, and auditable storage the company calls its Cold Storage system. The service is intended for use by institutional customers like mutual funds, exchange traded funds (ETFs), and hedge funds.

Gemini's Fees

Gemini has separate fee structures for its Gemini Exchange, its mobile app, and its Active Trader offering. For accounts under $1 million, fees are 0.250% for buyers, 0.100% for sellers, and 0.150% for auction participants. Certain very high-dollar transactions are fee-free.

The Gemini Pay app, which allows users to pay for goods with their cryptocurrency, is fee-free. Transactions can be made in Gemini dollars, the service's Gemini stable coin, which has the advantage of being less volatile in price as it is tied to the U.S. dollar. Pay app users can also pay with bitcoin, ether, litecoin, zcash, or bitcoin cash.

Gemini's Place in the Cryptocurrency Industry

The Winklevoss twins seem determined to be the white-hat guys in the Wild West of cryptocurrency trading.

Gemini has sought to distinguish itself from its rivals by stressing that it is licensed and regulated by the New York State Department of Financial Services, the agency that is responsible for overseeing banking, financial services, and insurance companies that do business in the state.

It has even obtained insurance for its customers' cryptocurrency assets.

Gemini's History and Leadership

The majority owners of Gemini are Cameron and Tyler Winklevoss.

The Winklevoss twins are best known for accepting a $65 million settlement of a suit against Mark Zuckerberg in which they claimed that Facebook was their idea and Zuckerberg stole it, as dramatized in the movie "The Social Network." At the time, all three were students at Harvard University.

The twins used some of that windfall to buy bitcoin and, later, ether, in their earliest days, according to The New York Times. That made them billionaires by 2017. Some of that bounty went into the creation of Gemini.

Now, Facebook looks literally like the Old World to them. "The idea of a centralized social network is just not going to exist five or 10 years in the future," Tyler Winklevoss told Forbes. "There's a membrane or a chasm between the old world and this new crypto-native universe."

Gemini's International Expansion

Launched in January 2015, the exchange went live for customers in the United States in October 2015. By mid-2016, the exchange was going international, initially in Canada and the United Kingdom.

Gemini soon expanded to Hong Kong, Singapore, South Korea, and Japan to cater to the skyrocketing population of Asian cryptocurrency enthusiasts. It now is in 50 countries worldwide.

In September 2016, Gemini introduced the first-ever daily bitcoin auction, a method followed in all modern stock exchanges but then a first for a cryptocurrency exchange. Daily ether auctions were launched in July 2017.

Gemini's Recent Developments

In its early days, Gemini appeared to be positioned as an exchange for institutional traders, not individual investors.

It was also, naturally enough, primarily a bitcoin marketplace. That has changed. More than 40 cryptocurrencies can be bought and sold on Gemini.

Gemini Pay

Now, Gemini appears to be pushing towards mainstream acceptance. Its Gemini Pay mobile app is accepted at about 30,000 retailers, including Bed, Bath & Beyond and Petco. It also has a partnership with a company called TaxBit to help users calculate their crypto-related tax obligations.

Cryptocurrency owners can even earn interest on Gemini. In early 2021, a savings account feature called Earn was introduced that offers annual interest rates of up to 8.05% on cryptocurrency holdings, a hefty premium over prevailing bank interest rates for conventional money.

Gemini Credit Card

A Gemini credit card is in the works.

The Winklevoss twins made noises about floating an initial public offering (IPO) early in 2021, but no firm plans have been announced.

What Is Gemini Exchange?

Gemini is a cryptocurrency trading platform with its own cryptocurrency, called the Gemini dollar. It allows buying and selling of more than 40 varieties of crypto coins. The platform is available through a website and a mobile app and offers separate interfaces for individual and institutional investors.

Who Owns Gemini Exchange?

The Gemini Exchange is owned by Cameron and Tyler Winklevoss. If there are other minority owners, they are very much in the background.

What Crypto Can You Buy on Gemini?

Here's the full list of cryptocurrency products that can be bought and sold and/or stored on Gemini, as of June 2021. (Names in parentheses can be stored but not bought or sold on the platform.) If some of these names are unfamiliar to you, you are not alone:

Aave, Amp, Basic Attention Token, Bancor, BarnBridge, Bitcoin, Bitcoin Cash, (Bread), (Caspian), Chainlink, Compound, Curve, Dai, Decentraland, Dogecoin, Enjin Coin, Ether, Filecoin, Gemini dollar, (Golem), Injective, (Keep Network), Kyber Network, Litecoin, Livepeer, (Loom), Loopring, Maker, (Numeraire), (Ocean), (OMG Network), 1inch, Orchid, Ox, PAX Gold, Polygon, Ren, SKALE, Somnium Space, Storj, SushiSwap, Synthetix, (tBTC), The Sandbox, The Graph, Uma, Uniswap, (Wrapped Bitcoin), (Wrapped Nexus Mutual), Yearn.finance, Zcash.

How Much Is Gemini Worth?

Gemini is a privately-held company, so estimates of its value are frankly guesswork. That said, the company employs 350 people.As reported by Bloomberg on Nov. 19, 2021, Gemini has a valuation of $7.1 billion.

Is Gemini Bigger Than Coinbase?

Gemini and Coinbase are, as of this writing, the dominant cryptocurrency platforms. They have comparable features, and both stress security and ease of use. Precise user numbers are hard to come by and are probably outdated as soon as they're posted. Gemini at one point had a slightly larger user base, at about 13.6 million compared to Coinbase's 13.3 million, according to BitDegree.

The Bottom Line

Gemini and its top rival, Coinbase, are currently the dominant players in the cryptocurrency platform business.

Cameron and Tyler Winklevoss have built their platform on a vow to bring safety and security to the cryptocurrency market. An early ad campaign promised "cryptocurrency without chaos."

Gemini is a licensed New York trust company and proudly proclaims itself a "regulated" exchange. The contents of online wallets are insured.

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.

Article Sources

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